Most people running small businesses would prefer to remain small and manageable. That does not mean that at times they shouldn’t think big, if only for a limited time.

Businesses are waking up to the fact that strategic alliances or partnerships can provide platforms to bid for larger projects or take on more interesting work. Where, for example, a small business does not have the required capacity to take on a new contract, or a larger firm needs to enlist more specialist help, forming a strategic alliance can enable them to compete.

Businesses who build relationships like this will be better placed to gain a significant competitive edge over their rivals. It’s more than a ‘virtual’ business and less than merging two businesses, and can offer enhanced reputation, improved effectiveness and lower risk.

Building successful partnerships with others who may be competitors takes time and trust but the benefits are worthwhile. Imagine, for instance, being able to fire your main supplier with sufficient enthusiasm for a particular project that they agree to combine their skills and experience to help you win the project. You immediately get the benefit of their improved purchasing power.

A successful alliance needs:

• Genuine commitment from both organisations.
• A firm understanding of what is expected.
• Suitably trained, capable people to carry out the job.
• Sufficient resources to ensure success.
• Patience to tackle obstacles – there will be some.
• Open communication.

Whilst there are clearly a number of legitimate concerns such as a lack of partner commitment, loss of control and potential loss of customers, these are fears which should not put anyone off exploring a strategic alliance which can improve their position.

You may find that a prospective partner already has a close working relationship with another company – perhaps one of your competitors. This is reassuring because the other party will know what is expected, and disconcerting because of the confidential information you may have to share. You could reconsider the amount of information passed on or alternatively simply disclose it and clearly indicate to your partner that you possess that most critical of ingredients for a successful partnership – trust!